Childcare Vouchers: cut childcare costs by £1,000/year Discussion Area

peeeeete

I work part-time but have been told by my employers HR department that the amount of childcare vouchers I am entitled to is calculated based on the equivalent full-time salary. Does anybody know if this is true as I cannot find any reference to it in any of the guides?

Thanks!

rpc

peeeeete wrote: »

I work part-time but have been told by my employers HR department that the amount of childcare vouchers I am entitled to is calculated based on the equivalent full-time salary. Does anybody know if this is true as I cannot find any reference to it in any of the guides?

Thanks!

What do you mean your entitlement? Is the issue to do with the reduced entitlement for 40% tax payers?

You are entitled to £243 per month provided that a basic earnings assessment says you expect to be under the 40% threshold.

The earnings assessment should be based on expected income so it wouldn't be right to say you get £60k per year because you actually receive £30k part time.

peeeeete

Thanks! Yes that's exactly what I meant. Do you know of any links / sources that reference this that I can give to my HR department? Thanks!

rpc

Well the HMRC guidance is at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/368483/employer-qa.pdf

But it sounds like you need an HR department with a brain cell between them. Hours worked is irrelevant, contractual basic pay is that starting point.

If they insist that your basic pay is the higher figure, I'd be expecting that to arrive in my next pay packet. Backdated.

rpc

As an example of how the guidance is implemented: https://www.flexiblebenefits.coop/media/2848/earningsassessmentform.pdf

Note this bit:

If part-time, enter actual part-time salary

fernando_vaz

Trying to work out whether it makes sense me to continue to claim Childcare Vouchers through my work or whether to switch to the new Tax-Free Childcare.

Currently, I earn under £40,000 and claim Childcare Vouchers through my work, which works out at £124 in vouchers a month in my pay packet.

My wife owns her own business (Ltd company), so can't claim Childcare Vouchers.

Our daughter is at nursery 4 days a week, costing around £600 a month.

Can anyone suggest what might be our best option?

rpc

If you aren't a 40% tax payer, why aren't you claiming £243 per month?

With vouchers, you save the 32% tax and NI which is £78 a month. If you pay 40% tax, your saving will be £52.

On a £600 childcare bill, if it works as advertised, you will save 20% or £120 a month under the new scheme.

AngelOfTheNorth

Is there any new information yet about whether the current scheme will indeed close in August, and the new one start in autumn? I know this is what was mooted, but not been able to find any recent information. I'm hoping the current scheme is extended a wee bit, because I'm likely to start a new job in September/October and want to enter the voucher scheme!

rpc

Highly likely - the legislation passed in December so it's just a case of ministers putting it into effect.

But who knows. The only snippet at budget time was from OBR:

an ongoing legal case means that there is some uncertainty over the Tax-Free Childcare policy, but at present we do not have firm evidence on which to assume a change in spending in our forecast

Wait for the Queen's Speech I guess or the emergency budget I guess.

edit: A quick google suggests that Edenred lost the case, so one assumes that the uncertainty has gone now and the government will press on.

AngelOfTheNorth

Cheers. Do we know yet if one parent is going to be able to do the old voucher scheme and one the new tax free scheme? Apologies if this is an obvious question.